You don’t need to be a cosmopolitan to support more migration

New from Dani Rodrik:

"how strong a preference must we have for our fellow citizens relative to foreigners to justify the existing level of barriers on international labor mobility? More concretely, let φ stand for the weight in our social welfare function on the utility of domestic citizens relative to the utility of foreigners.

When φ=1, we are perfect cosmopolitans and we see no difference between a citizen and a foreigner. When φ→∞, foreigners might starve to death and we wouldn’t care.

For the policy in question [allowing the movement of 60 million workers from poor to rich nations] to reduce social welfare in the rich countries, it turns out that φ must be larger than 4.5. Is a welfare premium of 450 percent for fellow citizens excessive? Is it reasonable to think that a foreigner is worth less than 22 percent a citizen?"

Struggling for the right words… contender for absolute worst ‘aid’ project in the world

Der Spiegel reports… the EU is planning to provide training, equipment, and DETENTION CAMPS to the government of Sudan, which is led by a wanted war criminal, in order that they can prevent human beings from crossing the border out of Sudan in the direction of Europe. The project is to be coordinated by the German development agency GIZ. Wow I feel sorry for the idealists at GIZ who signed up in order to help people, and now they’re building detention facilities for war criminals.

"The ambassadors of the 28 European Union member states had agreed to secrecy. "Under no circumstances" should the public learn what was said at the talks that took place on March 23rd … Europe wants to send cameras, scanners and servers for registering refugees to the Sudanese regime in addition to training their border police and assisting with the construction of two camps with detention rooms for migrants."

Let’s recap that arrest warrant for the wanted, at large, alleged war criminal who is the President of Sudan, the man we are apparently hoping to pay to do our dirty work:

"Charged, as an indirect (co) perpetrator, with ten counts of crimes: five counts of crimes against humanity: murder, extermination, forcible transfer, torture, and rape: two counts of war crimes: intentionally directing attacks against a civilian population as such or against individual civilians not taking part in hostilities, and pillaging; three counts of genocide: by killing, by causing serious bodily or mental harm, and by deliberately inflicting on each target group conditions of life calculated to bring about the groups’s physical destruction, allegedly committed at least between 2003 and 2008 in Darfur, Sudan.” (my emphasis)

I mean, certainly you can criticise things like sanctions and aid conditionality, but is there any point at which we might consider it to be a bad idea to do business with this government? Is there any moral threshold here? Does Sudan need to get to be charged with 4 counts of genocide before we stop giving them stuff? Is only 5 counts of crimes against humanity not quite enough??

Note that the arrest warrant refers only to Darfur, ignoring all the other confirmed bombings of civilian and humanitarian targets by military forces in South Sudan and the Nuba Mountains, ignoring deliberately destroying crops during a famine, and ignoring the reports of slavery and child soldiers in Northern/Central Sudan.

I despair.

ht: John Ashworth

What’s the single biggest growth opportunity that no-one really tried?

Paul Collier and Astrid Haas just wrote an IGC blogpost “Why Kampala holds the single biggest growth opportunity for Uganda.” Single biggest? Well indeed, the first rule of blogging is HYPERBOLE, but then the first rule of reading blogs should be a heavy dose of scepticism. Second, I’m reminded of Michael Clemens’ presentation on The Biggest Idea in Development That No One Really Tried. Might migration (the kind that Paul apparently thinks is harmful for poor countries) hold a bigger growth opportunity for Uganda than better urban planning in Kampala?

At present, around 1% of Ugandans live and work overseas (roughly 400,000 of a population of 37.6 million). This 1% of the population send home 4% of Uganda’s GDP in remittances. According to a Gallup poll, around 35% of Ugandans would permanently move to another country if they were allowed to. If they all could, and sent back as much as current Ugandans abroad do, that would be a one-off 140% increase in Uganda’s economy. Or if Uganda had the same level of emigration as the UK does (8%, 5.2 million of a population of 64.1 million Brits live and work overseas), that would be a 28% increase in Uganda’s economy. And that’s totally ignoring the increase in income for the actual migrants themselves. Median income in Uganda is $2.5 per day (in PPP), so even a job on UK (“relative-") poverty pay levels of around $23 per day would be a NINE-FOLD increase for them. Needless to say, the main reason that more Ugandans don’t work in high-wage economies, is that the governments of high-wage countries impose restrictions on the entry of people, particularly those from poorer countries.

Brain drain I hear you say? Michael Clemens killed that one too (ethically it is pretty unreasonable to restrict individual's freedom to such an extreme extent, even if there were any real evidence that emigration of highly-skilled people hurt an economy, which there isn't anyway).

So yes, clearly planning Kampala’s urban development is important for growth. But does it really have more “potential” than something that could double the country’s economy overnight?

Applying behavioural insights to impair life chances

David Halpern, Chief Exec at the Behavioural Insights Team (aka “Nudge Unit”) has a new blog up about how behavioural science can be used to improve people’s life chances.

"Why is it that a Kenyan market seller spends half her profit on money lenders rather than saving a tiny sum each day to escape such debt? Or why does a low income family in the UK or USA spend twice as much on a stove (cooker), bought on expensive hire purchase, than a middle class family?"

The thing is, as we know from Branko Milanovic, the country that you are born in matters more for your life chances than everything else combined. "A proper analysis of global inequality today requires an empirical and mental shift from concerns with class to concerns with location,"

So what does the BIT have to say about the movement of people? As Matt points out, the Home Office is currently paying the BIT to find ways to convince illegal migrants to voluntarily leave the UK. That is, to support the Home Office in its agenda of shutting down the single best way that exists of improving someone’s life chances. Perhaps someone could instead work on a clever “nudge” to make people less scared of foreigners?

Why Germany is probably doing more for Syria than the UK

How do you compare the good that the UK is doing with its whopping 0.7% aid budget, against the good that Germany is doing by accepting large numbers of refugees? A smart (German) friend asked me if there are any numbers on the size of the remittances we might expect to see from Syrian refugees in Germany to Syria. Of course, remittances are far from the most important reason for accepting refugees, but they do allow for a nice easy cash sum with which we can make a comparison to aid flows.

The UK is spending somewhere between £200 million and £400 million on Syria this year. For comparison, whilst Germany is ramping up aid spending, it is still less than 0.4% of GDP overall.

But in terms of numbers of refugees, Germany expects to take 800,000 this year (compared to just a few thousand in the UK), though fewer than that have been documented so far, and not all will be Syrian. Let’s assume for a moment that the total will be 400,000 from Syria, and they will be quickly processed so that they are able to work. If every Syrian refugee in Germany was able to send home £1,000 to family and friends, that already equal Britain’s aid budget for Syria. Is £1,000 a realistic prospect? One way to think about this is to look at remittances from existing migrants in Germany (p33) to the middle east. There are currently around 67,000 migrants from Lebanon living in Germany, who send back to Lebanon almost $1 billion a year - that’s around £9,500 each, which seems almost implausibly large, but who knows, the Chinese and Vietnamese also send home large sums, and the Nigerians send home even more. In any case, it certainly seems plausible, even likely, that Syrian refugees to Germany, once permitted to work for even low German salaries, will be able to send home at least £1,000, if not more.

Is rescuing migrants from the Med good value for money?

Thousands of people die each year trying to cross the Mediterranean to seek asylum in Europe. Christopher and Regina Catrambone, American and Italian entrepreneurs, decided to take matters into their own hands and set up their own private rescue mission.

Naturally when I read that

"a fundraising drive by the activist organisation Avaaz reached $500,000, slightly less than a month’s costs”,

I started wondering about cost effectiveness. Elsewhere the Guardian article states

"Setting up Moas was not cheap, with monthly operating costs of up to €600,000"

and

"The Phoenix rescued 1,462 people in 10 weeks"

So let’s go with the higher figure of €600,000 per month - over 10 weeks (2.3 months) that is a total cost of €1.4m (roughly $1.6m or £1m). And to save 1,462 people, that is a cost of £700 (~ $1000) per death averted.

Is that a lot or a little? As Owen has pointed out, the UK NHS considers anything less than £100,000 per death averted to be good value for money.

At the other extreme, childhood vaccinations, "long recognized as among the most cost-effective uses of limited health resources in low-income countries” (Disease Control Priorities) cost $275 per death averted.

At face value, Catrambone’s "Migrant Offshore Aid Station" (MOAS) looks like a pretty good value for money philanthropic bet.

Migration fact of the day

"Today, approximately 7 million Indians work in six GCC countries, which is more than 50% of estimated 13 million foreign workers present in the GCC. The Indian workers in GCC remit about US$40 billion i.e. around 57% of the total remittances, i.e. US$70 billion India receives annually. Besides contributing significantly to the national forex reserves, the remittances received directly by the workers’ families help in poverty alleviation, support local business, promote entrepreneurship and generate employment."

That’s Zakir Hussain on the World Bank blog. Worth remembering this context next time you read a scandal about the poor treatment of Indian workers in the Gulf.

Celebrating more Brits

The population of the UK has increased by 500,000 in the last year.

Unlike what you may read elsewhere, this is great news.

- British people are great - having more of us is better
- London is the best part of Britain, and not coincidentally the most populous and densely populated part
- Population growth is concentrated in cities
- Larger cities support economies of scale, more specialisation and diversification, enabling the clusters of activity and agglomeration that drive innovation
- A larger population means a greater supply of innovators
- A larger population means a greater demand for innovators, and a bigger market for producers
- A larger population means more people to share the burden of fixed costs, including national debt

Of course there are costs to crowding, and we need to plan for more infrastructure provision (not least building more housing), but that’s just part of life and really shouldn’t be beyond our wit.

Labour Beyond Aid

The UK Labour Party has a new pamphlet out with ideas for future development policy, labelled "Beyond Aid."

How does it measure up?

CGD looks at 7 components of "Commitment to Development" in the annual index; aid, trade, migration, security, environment, technology, and finance.

Labour's pamphlet talks extensively about 2 of the 6 non-aid components of the index: the environment and security.

There is next to nothing on trade, migration, technology, and finance.

Out of 26 countries, the UK ranks 4th overall which is pretty good. Though that varies a lot between the components; Aid (4), Trade (7), Finance (2), Migration (13), Environment (11), Security (7), Technology (20).

There's more to International Development than Aid, but also more than climate change and security. 

Lampedusa Update

In 2013 the deaths of 366 migrants at sea off the coast of the Italian island Lampedusa caught the headlines. Last week another 300 died. Last year, it was an estimated total of 3,500. 

European governments, including the British one, are opposed to rescue missions on the grounds that this creates a "pull-factor" encouraging more people to make the trip. How does that claim stack up? We now have the first month's data since the end of the Italian Mare Nostrum rescue mission. 

In an interview with Mark Goldberg, John Dalhuisen of Amnesty International cites UNHCR figures that there were 60% more sea arrivals in Italy in January 2015 than January 2014, despite the widely publicised ending of the sea rescue mission. John cites this as evidence that it is push factors, such as the war in Syria, that have led to the large increase in refugees and migrants attempting the crossing, not "pull factors". You might want a few more data points if you wanted to be scientific about this, but 60% is a large increase, and those data points are human lives we are standing by and letting drown. I'm not sure this particular experiment would pass an ethical review board.

The Mr. Miyagi Theory of Economic Development

Very interesting hypothesis from Ricardo Hausmann on Project Syndicate.

The bottom line is that urbanization, schooling, and Internet access are woefully insufficient to transmit effectively the tacit knowledge required to be productive. That is why today’s emerging markets are so much less productive than rich countries were in 1960, even though the latter were less urban, had higher birth rates and less formal schooling, and used much older technologies. 

The policy implications are clear. Knowhow resides in brains, and emerging and developing countries should focus on attracting them, instead of erecting barriers to skilled immigration. They should tap into their diasporas, attract foreign direct investment in new areas, and acquire foreign firms if possible. Knowledge moves when people do.

The Karate Kid reference is from the very entertaining powerpoint here.

On Immigration

I need to get some of this stuff out of my head to make some space in there for my actual day job. Since the clusterfuck David Goodhart book-copy-and-pastes op-eds started coming out a few weeks ago my head has been all fogged up with rage. Half of the frustration is simply how poorly he structures his arguments.

So here is some structure.

At the highest level there are two things to care about
1. The impact of policy (this is the utilitarian, consequentialist angle)
2. The Kantian ethics (what is a just process? we should care about the means as well as the ends)

Point 2, made repeatedly by Michael Clemens and others in the open borders camp, is that regardless of what the consequences of immigration are, individuals have rights, and states shouldn't be able to prevent people from leaving countries. As a Brit with some education, I have the right basically to live wherever I want. The same does not apply to smarter and harder working people than me who happen to be born in South Sudan, or most developing countries. In technical terms, this is called "fucked up."

Back to point 1 - there are three areas of concern
1.1 - The impact on the receiving community
1.2 - The impact on the migrant
1.3 - The impact on the sending community

Now, the strongest evidence is clearly on 1.2 - there are massive overwhelming positive impacts for the migrants themselves, who can increase incomes by orders of 1000% overnight.

The weakest evidence is on the other two points. There are reasons, theoretical and empirical, to think that immigration can have both positive and negative impacts on communities at large.

On 1.1 - perhaps the strongest evidence amongst the lot, is that the labour market impacts on receiving communities are not large (they did not took our job). There isn't a lot of evidence on the impact on public services and the like - though on average the foreign-born living in Britain are larger net contributors to public finances than the native born. So we are left with something vague about identity and community (more on this in another post).

On 1.3 - there is strong evidence of positive impact through remittances - remittances are substantially larger than foreign aid flows. There isn't much evidence of a brain drain, and actually evidence pointing the other way towards a "brain gain." Neither is there any evidence of a damaging impact on political reform. On the contrary, there are reasons to think that diaspora can help fund and influence reform movements more effectively from outside a country where they are not subject to political oppression. More from Claire Melamed here.

So to conclude, strong positive evidence of positive impacts for migrants and receivers of remittances, and then a bunch of weak vague stuff about community and governance. Add to that, the ethical or rights-based arguments.

And finally back to Goodhart, and his line that we should not care about people from Burundi more than people from Birmingham. But do we really need to care about them more to be in favour of immigration? From my reading of the evidence, I don't think that immigration does impose a net cost on Britain, but even being generous and assuming it did, I would weight that impact to be of the order of 1/10th of the positive impact to the migrant. Caring about people from Birmingham is fine, but the question is how much more should you care about them than someone from Burundi. I would image that there is some ratio at which Goodhart would support imposing a cost on a Brummie for a gain to a Burundian. What if we could make a Brummie worse off by £1 to increase the welfare of a Burundian by £10 billion? Or is it really never acceptable for British government policy to reduce the welfare of a British person by any amount, no matter how small, in order to increase a foreigner's welfare, no matter how large the gain? Not even for £10 billion? Martin Wolf does make the case for a zero weight, which is at least a coherent and explicit position on the issue, even if I do think it is abhorrent. Elsewhere, in a long and math-y blogpost YouNotSneaky estimated that for Mexican-US immigration, you have to value a Mexican at less than 1/20th of an American to be against immigration.

Do you care about foreigners less than locals? What's your number? Exactly how much less? Are foreigners half a local person? A tenth? A hundredth?

Paul Collier's Migration Book

Drawing on original research and numerous case studies, Collier explores this volatile issue from three unique perspectives: the migrants themselves, the people they leave behind, and the host societies where they relocate. As Collier shows, those who migrate from the poorest countries, primarily though not exclusive the young, tend to be the best educated and most energetic in their cultures. And while migrants often benefit economically, the larger impacts of mass migrations remain unsettling. The danger is that both host countries and sending societies may lose their national identities-- an outcome that Collier suggests would be disastrous as national identity is a powerful force for equity. Collier asserts that migration must be restricted to ensure that it helps those who remain in sending countries and also benefits host societies that make the investment on which migrant gains rely. 

This might just be the point at which I stopped being a fan of Paul Collier. I was quite excited about this book because I presumed that naturally it would be pro-immigration. I suppose his old white man demographics have outweighed all his education? I'll probably still read it, as presumably he will at least have a better grasp of at least some of the actual evidence on the issue than Goodhart. Still, it makes my skin crawl. I understand that we aren't going to win around the UKIP racists and get open borders any time soon, but it is deeply depressing when even development people and/or supposed lefties harbour this fear and suspicion of poor foreigners. Maybe brown people threaten your national identity Paul, but they don't threaten mine.

Anyway for now I'll stick with the simple chart which debunks the line that "national identity is a force for equity." Actually, two-thirds of global inequality can be found between countries rather than within countries. So even a perfect income distribution within countries would still leave two-thirds of global income inequality intact.

Branko Milanovic, (via Tim Worstall). Incidentally, surely - surely, Collier should have read Milanovic?

From the department of baffling headlines

It's been a while since I've beaten on the Guardian (I love you really Guardian, you're* still my main newspaper, despite the typos in 3 out of 3 articles I read the other day).

But really:

Stowaway from Angola highlights airport security problems 

Police continue to try to identify man who fell from BA plane on to London pavement, the second African stowaway in recent weeks

Personally, I'd say that the story of a young man in his 20s, wearing a grey hoodie, jeans and trainers, who was so desperate for the chance of a better life that he risked and lost his life by sneaking into the hold of an aeroplane bound for London, mostly highlights the utterly grotesque global inequality that we choose to tolerate because they are mostly out of sight and out of mind, and we are worried about the impact of all these foreigners on our precious "community" or some other vague bullshit. Not fucking airport security.

(*embarrassing typo here fixed but whatevs, I can and will continue to beat on the Guardian for typos, because this is not a national newspaper it is a BLOG. Thanks as ever for the vigilant editing though K)

The solution to Britain's housing crisis

I just had a great idea inspired by David Goodhart. Clearly the reason that poor countries have monstrous governments is that all the smart liberal citizens who might have otherwise overthrown them have chosen to use their exit rather than their voice and left the country, so we should force them all to stay.

Similarly, the reason that Britain has absurd policies, such as the housing policy that leads to the smallest and most expensive houses in Europe, is that everyone who might otherwise have complained has left - about 1 in 10 Brits or 5-6 million people live abroad. So there's a simple solution, ban emigration from Britain, forcibly repatriate the 5 million, and all our political problems will naturally be solved. The "post-liberal" political solution. Sounds great huh?

Kigali to Oxford

This draft has been sitting here since I got back a week ago, because I wasn't sure how passionate and emotional and angry I was comfortable with being in public. The short story is, as I sat in the coffee shop at Kigali airport waiting for check-in to open, a man who I'd met a couple of days earlier asked me with total sincerity to take one of his children with me back to England so that they could get a better education and a chance of a better job, which for some reason really got to me. A man who totally seriously wanted a total stranger to take one of his children thousands of miles away because he knows that living standards are so much better in rich countries. And he couldn't move himself because of our totally self-absorbed immigration policies. So I'll skip the rant, but sometimes it just breaks my heart that we live in a world where such desperation is so mundane.

In other news, 3 months away is probably too short for any proper reverse culture shock, but I do admit to being mystified by the battery-powered electric salt and pepper grinders in the apartment I am renting, which make absolutely no sense whatsoever. Also a few people have commented that I've lost weight, which I hadn't noticed at all, but seems plausible following a typically overwhelming first-trip-to-the-supermarket-following-a-period-of-developing-country-living. Seriously, no wonder we have so much obesity when food is this cheap and easy.

British attitudes to immigration

Analysis of the electorate's view of immigration, by the anti-racism campaigners Searchlight, the thinktank British Future and others, shows there is a majority for sanity and solidarity out there, which could be coalesced. A quarter of the population are hardline anti-immigrant - some of them racist. But another quarter, essentially Guardian and Economist readers, support multiculturalism. The remaining 50% are up for grabs, but can be won over.

Neal Lawson in the Guardian 

What Would Happen If We Let All The Immigrants In?

Sense from Matt Yglesias:

According to Gallup there are 150 million people around the world who say they'd like to move permanently to the United States. Right now the United States has about 89 residents per square mile. Add another 150 million people and we'd be at around 135 people per square mile. How would that stack up in context? Well, France has 303 people per square mile and Germany has 593. Japan has 873. The Dutch have 1,287! 

All those places have their share of problems (and so do we) but none of them are exactly post-apocalyptic hellscapes.

The equivalent Gallup number of people who say they'd like to move permanently to the UK is 45 million. That would take us from the already relatively dense 673 people per square mile to 1,153 people per square mile, edging out Rwanda, but still not quite as dense as the Netherlands or South Korea. I think we'd manage. Personally, I also think British people are great, and it would be great to have more of us.

Immigration in the UK

The case for migration is a compelling one. And it needs to be made. The OBR estimates current levels of migration boost GDP by 0.5 per cent. Current levels of population growth are no higher then they were in the early 1900s. And only just over one in 10 new jobs created in the UK goes to migrants, rather than British nationals. These are the facts about immigration, and they have to be pushed vigorously and consistently.

Barbara Roche, former Immigration and Asylum Minister, in the Independent (via TH)

Everything you ever wanted to know about migration and development

Well not quite, but the latest Development Drums podcast with Michael Clemens covers a lot of ground, including the case that should now be familiar for why migration has such enormous potential for development, and rebuttals to some of the most common criticisms. I am though continually amazed by how many smart development-industry types are so sceptical about migration (so if this is you, listen to the podcast now).

And for the wonks, there are also a couple of papers that were new to me:

A paper by Branko Milanovic calculating the determinants of individual earnings across countries. Earnings are partly determined by individual characteristics, and partly simply by what country you live in. Which is more important? It turns out that 59% of the differences in earnings is determined just by the country you live in. More than all of your personal characteristics - your experience, your education, your talents, your effort - all of it. I think that one of the defining differences between the left-wing and the right-wing is in the underlying assumptions about the determinants of individual success. Is it down to luck, or skill? If success is primarily due to skill, then a free market is going to deliver "fair" outcomes and the government should butt out. You work hard, you do well. But if success is primarily due to chance, then you can work as hard as you like, but it won't do much good if you were unlucky to begin with. So there is a "fair" case for the lucky to compensate the unlucky. So the life chances of humans born on earth are at least 59% chance. If you're born in Togo, the odds are stacked well against you.

Second, an old paper by David Card from 1990. In 1980, the US and Cuba made a one-off agreement to admit as many people as wanted to move. Over 100,000 people moved from Cuba to the Miami area. This amounted to a 7% increase in the Miami labour force in just 3 months - a huge increase. And yet there was no impact on unemployment or wages of existing workers in Miami.